Data Stream

The shortage of information technology workers costs the United States $105.5 billion annually, according to a new survey by the Computing Technology Industry Association.

"Our research shows the majority of businesses today attribute missed deadlines, lost productivity and higher expenses to the nationwide shortage of qualified IT service and support professionals," said John Venator, president of the association that represents 7,500 hardware and software manufacturers, distributors, resellers and others in the IT field.

The survey of 878 chief information officers and other IT executives found that 10 percent of IT positions, a whopping 268,740 jobs, are unfilled.

About one quarter of the companies surveyed claimed to have lost productivity because of the worker shortage.

The recruitment problem appears worse for companies with more than $1 billion in annual revenue. About 77 percent of those surveyed said that finding IT workers is difficult.

Steve Goldman

F5 Networks Inc., a provider of Internet traffic management products, plans to use part of the $31 million raised from its Oct. 5 offering of 2.2 million shares of common stock to pump up its federal sales division in Laurel, Md.

The Seattle-based company plans to bolster its existing sales, marketing, services and investments in the federal market. Steve Goldman, senior vice president of sales, marketing and services, said the company is committed to be the leader in providing Internet management traffic solutions to federal government institutions.

Among F5's customers are the Army, CIA, Federal Reserve Board, NASA, Office of the Secretary of Defense and the Navy. A federal commission studying Internet tax policy is asking the public to offer suggestions for devising a workable plan to tax online transactions.

The proposals must be submitted by Nov. 15 for review by the Advisory Commission of Electronic Commerce before its third meeting in San Francisco Dec. 14-15. Several interested industry and public policy groups, such as the National Governors' Association, are preparing to deliver reports with recommendations for collecting sales taxes on Internet transactions.

The commission, which is studying whether and how to tax Internet transactions, laid out a detailed list of criteria for what it would regard as acceptable tax plans. It said the plans should be simple, place little or no burden on sellers, protect the privacy of the purchasers and be technologically feasible using widely available software for collecting taxes.

The commission also cautioned that its request for recommendations "should not be interpreted as a decision to adopt a plan to implement taxation of Internet-based transactions." Chaired by Virginia Gov. James Gilmore (R), the commission will deliver its report to Congress next April.The next round of CACI International Inc.'s fight with a disgruntled stockholder for control of the company resumes Dec. 9, when the Arlington, Va.-based company holds its annual meeting to elect its board of directors.

Alan Parsow, who owns 5.1 percent of CACI's stock, put forth a slate of eight nominees in September. He has said he wants to force a sale of the company.

On Oct. 14, the company renominated the 10 members of the board plus a new member, Richard Armitage, a former ambassador and assistant secretary of defense.

Since 1993, he has been president of Armitage Associates LC, an international business and policy consulting firm in Arlington.

California Gov. Gray Davis (D) has signed an executive order requiring state agencies to use only legal, licensed software and to put into place software management programs to prevent using illegal, pirated software.

The use of illegal software in the United States caused a loss of 109,000 jobs, $4.5 billion in wages and nearly $1 billion in tax revenue in 1998, according to the Business Software Alliance, a Washington organization representing software developers.

Davis' order, signed Oct. 15, also applies to third parties doing business with California. President Clinton last year issued an executive order requiring federal agencies to use legal software.Computer distributor Decision Support Systems Inc. of Ashburn, Va., and Bitco International Inc. of McLean, Va., have merged to form Bitco Enterprises.

"The good news about this merger is that the various business lines, while very synergistic, do not overlap," said Jim Bitonti, former president of Bitco who will hold the same position with the new company.

Company officials declined to discuss financial terms of the agreement. Bitco officials said a merger announcement would be released Nov. 1.

DSS officials would not comment on the merger. DSS sells storage equipment, desktops, notebooks, Web servers and multimedia equipment to government and commercial clients. Its V-Squared subsidiary assembles white boxes.

Bitco's Web site said the company has 450 employees in several offices in the United States and Asia and provides comprehensive IT services, including software development, year 2000 remediation work and IT component acquisition and logistics. The company was founded in 1987.

Bitco's business is mainly commercial, while DSS' business is split evenly between commercial and government clients, said Bitonti. But business will improve because "we are going from a single line of service on the distribution front to a full turnkey solution offered from a companywide basis."

This type of merger is one way that distributors such as DSS stay in business, said John Allen, vice president of Quarterdeck Investment Partners Inc.'s office in Washington. Distributor-type companies have been in a quandary about whether the distributor model will exist in the long term, Allen said.

Under the agreement, signed Aug. 1, DSS and V-Squared are wholly owned enterprises of Bitco Enterprises. The divisions will continue to conduct business under their current names, and the new company will be housed in DSS' Ashburn office by the end of October, Bitonti said.

John Jamshid, formerly DSS president and chief executive officer, will become chief executive officer of the new company. James Bitonti, whose son is company president Jim, will serve as chairman of Bitco Enterprises. He previously was Bitco's chairman and CEO.

In addition, Ann Bitonti, sister of Jim, will serve as executive vice president and chief technology officer. She was Bitco's vice president of systems. Beth Mruk, also a sister, will be executive vice president of procurement operations; she was Bitco's vice president of procurement operations. Ann Pasternacki, DSS vice president of administration, will hold the same position in the new company.